09.07.17

Uber: What Happens to Vision When Leadership Fails

Karl R. LaPan, President and CEO of The NIIC

Say what you will about Uber and its founder and former CEO Travis Kalanick, but one thing experts agree on is that this company was innovative in its vision and its business model.

The tech startup was founded with a goal of bringing people together and connecting cities. Nothing had been done on that scale previously. Look no further than its mission: “to make transportation as reliable as running water, everywhere, for everyone.” Pretty innovative, right?

Equally innovative has been how emerging companies have taken advantage of the sharing economy; however, as my colleague Mark Long aptly points out, “The sharing economy is experiencing growing pains and operational road blocks.” Additionally, he observed that, “Good service is often acknowledged but bad incidents (many have plagued Uber) are repeated and repeated all over the place opening the doors to having your business eclipsed by competitors like Lyft.”

In addition to the social impact, Kalanick was proud of Uber’s model in that it has the power to curb traffic and congestion, air pollution, and even parking. He also touted the positive societal impacts of ride-sharing, like a greater sense of community, reduced stress and fewer accidents.

The problem is that his vision was drowned out by numerous scandals, controversies and questionable business practices before a shareholder revolt. Also, Kalanick personally was involved in a number of public displays of poor judgment and leadership. The Executive Editor of Fortune wrote a book about Uber. He called the Uber culture, “an extreme example of the break the rules, aggressive, ruthless, doing something new culture that is very prominent in Silicon Valley.” Do you think the more than $12 Billion raised from money people had anything to do with this win at all costs and take not prisoners elitist attitude? It sure did. Insane valuations like Uber only reinforce an irrational exuberance in the minds of its purportedly untouchable leaders who lack humility.

I don’t intend to spur debate or analysis as to whether any of his actions were justified. I think it is clear they were not. I raise these points because I think it illustrates what can happen to a good business model when leadership fails. An innovative vision can only go so far if the people at the top are failing. One of my graduate school professors once said, “Organizations mirror the dysfunction of their leaders.” She hit the nail on the head!

What can entrepreneurs learn from this situation:

  • Lesson 1: Culture is largely driven by the tone at the top. Not many people I know want to work for this type of toxic culture or leader. Top leaders set the ethical climate and guiding values for an organization. When an organization sets and manages people by the wrong targets, it drives the wrong behaviors.
  • Lesson 2: Uber is a wake-up call from the Father of Management Peter Drucker, who opined, “Culture eats strategy for lunch.” So even if you have a great strategy, if the culture isn’t right, it will not matter what direction or vision you might have and while Uber is only about 7 years, culture runs deep and changing it will require new levels of transparency and authenticity, new leadership (this alone is insufficient to change culture) and discovering what Jim Collin’s calls getting your core values right are for Uber (this article link will help you and your team get them right for your organization). Culture and strategy are linked and aligned, and when they are disconnected it results in companies making poor choices. This is clearly the case at Uber.
  • Lesson 3: Leadership can be cultivated. Very few people are born with natural leader qualities. Leaders are self-made, willing to learn, vulnerable, humble, want to be coached, and have high levels of self-awareness. Leadership is not positional or hierarchical. I believe that, with high levels of emotional intelligence, time and experience, ordinary people can rise to greatness.

One of the best things you can do for your career is surround yourself with people who make you a better person, a smarter person, a more empathetic person, and who challenge your thinking and push you. If you want to build a business of substance, you need to work with people of substance. Come seek out The NIIC. We are here to advance your dreams and bring your vision to life.

What do you think? Can Uber bounce back and regain credibility in its leadership? Or is it too late? Share your thoughts in the comments. Remember, Lee Cockerell, former EVP Walt Disney World once observed, “Every leader is telling a personal story by his or her behavior. What story do you want to tell?”

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